Sanstar Limited IPO (Sanstar IPO) – Review, Valuation, Financials, Date & GMP

Sanstar Limited IPO (Sanstar IPO) Review –

Sanstar Limited IPO (Sanstar IPO) is set to open from 19th July 2024 to 23rd July 2024. This article will analyze the financials , strengths and weaknesses of the Sanstar Limited IPO (Sanstar IPO). Keep scrolling below to read more!

Sanstar Limited IPO (Sanstar IPO) Overview –

Established in 1985,

Sanstar Limited is one of the major manufactures plant-based specialty products and ingredient solutions for food, animal nutrition and other industrial applications in India. The company’s product portfolio includes liquid glucose, dried glucose solids, maltodextrin powder, dextrose monohydrate, native maize starches, modified maize starches, and by-products such as germ, gluten, fiber and enriched proteins amongst others.

These products are used in:

  1. Food products as ingredients, thickening agents, stabilizers, sweeteners, emulsifiers, and additives (in baked goods, confectionery, pasta, soups, ketchup, sauces, creams and desserts);
  2. Animal food products as nutritional ingredients; and
  3. Other industrial products as disintegrants, excipients, supplements, coating agents, binders, smoothing and flattering agents, and finishing agents.

The company has two manufacturing facilities covering a total area of 10.68 million square feet (approx 245 acres) at Dhule in the state of Maharashtra and Kutch in the state of Gujarat. With an installed capacity of 3,63,000 tons per annum (1,100 tons per day), they are the third largest manufacturer of corn-based specialty products and ingredient solutions in India.

The company exports its products to companies in 49 countries including Asia, Africa, the Middle East, America, Europe and Oceania. The company also has a pan-India presence where its products are sold in 22 states.

As of March 31, 2024, the company employed 271 people (including 60 permanent employees) at its plants in Kutch and Dhule and at its headquarters.

Sanstar Limited IPO (Sanstar IPO) Synopsis-

Sanstar Limited IPO (Sanstar IPO) is set to be open from 19th July 2024 to 23rd July 2024, offering only fresh issue of 4.18 crore shares aggregating to Rs 397.10 crores and offer for sale(OFS) of 1.19 crore shares aggregatin to Rs 113.05 crores. This NSE,BSE IPO follows a Book Built Issue IPO.

The total issue size of this IPO amounts to Rs. 510.15 Crores. The company has allocated shares 35% to retail investors, 50% to institutional and 15% to non institutional investors.

ParticularsDetails
Opening Date19th July 2024
Closing Date23rd July 2024
Lot Size150 Shares
Face ValueRs. 2
IPO SizeRs. 510.15 Cr
Fresh IssueRs. 397.10 Cr
IPO Price RangeRs. 90 – 95
Min. InvestmentRs. 14,250
Offer for Sale (OFS)Rs. 113.05 Cr
Employee Discount
N/A
Basis of Allotment24th July 2024
Refunds25th July 2024
Listing Date26th July 2024
DRHP Draft Prospectus:Click Here
RHP Draft Prospectus:Click Here

Sanstar Limited IPO (Sanstar IPO) Book Running Lead Managers –

  • Pantomath Capital Advisors Private Limited

Sanstar Limited IPO (Sanstar IPO) Registrar to the offer –

The registrar for the Sanstar Limited IPO (Sanstar IPO) is Link Intime India Private limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

The Objective Of The Issue –

The company proposes to utilize the Net Proceeds from the IPO towards the achievement of the following objects:

  1. Funding the capital expenditure requirement for the expansion of company’s Dhule Facility;
  2. Repayment and/or pre-payment, in part or full, of certain borrowings availed by the Company, and;
  3. General Corporate Purposes.

Key Performance Indicator –

The market capitalization of Sanstar Limited is Rs 1731.32 Cr.

KPI as of March 31, 2024.

Earning Per Share (EPS): Post IPO
₹3.66 per Equity Share
Price/Earning P/E Ratio: Post IPO
25.93
Return on Net Worth (RoNW):30.92%
PAT Margin(%)6.17%
Net Asset Value (NAV):₹22.17 per Equity Share

Financial Status –

Sanstar Limited’s revenue decreased by -10.58% and profit after tax (PAT) rose by 59.71% between the financial year ending with March 31, 2024 and March 31, 2023.

Particulars(in Rs. Crores)FY 24FY 23FY 22
Revenue From Operations1081.681209.67504.77
PAT66.7741.8115.92
Net Worth215.91149.2848.97
Total Assets527.57368.35207.45
Total Borrowings127.64111.7085.22

Evaluation of P/E Ratio

The P/E Ratio of Sanstar Limited is 25.93.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is N/A.

Peers of Sanstar Limited – 

Sanstar Limited peer comparison with similar listed entities. (As on March 31, 2023)

Company NameEPS (Basic)NAV (per share) (Rs)P/ERoNW (%)P/BVFinancial statements
Sanstar Limited4.7515.3719.9830.926.18Consolidated
Gujarat Ambuja Exports Ltd.7.5460.3718.6512.492.33Consolidated
Gulshan Polyols Ltd.2.85123.6373.312.301.69Consolidated
Sukhjit Starch & Chemicals Ltd.31.98321.7515.019.941.49Consolidated

Sanstar Limited IPO (Sanstar IPO) Strengths –

  • Sanstar Limited has demonstrated impressive growth over Fiscal 2021-2023, indicating strong operational efficiency and market acceptance.
  • The company operates two major facilities in Gujarat and Maharashtra enabling large-scale production and supply capabilities.
  • Sanstar Limited exports to 49 countries across multiple continents showcasing its broad international presence and acceptance of its speciality products.
  • The Dhule facility features state-of-the-art automation which enhances production efficiency and quality while minimizing costs and errors.
  • Demand of plant based ingredients and speciality products is increasing globally.

Sanstar Limited IPO (Sanstar IPO) Weakness –

  • Sanstar Limited lacks fixed contracts for maize procurement, its primary raw material, making it vulnerable to price fluctuations and supply disruptions.
  • The company requires substantial working capital to purchase and store maize during its peak arrival season. Insufficient funds during this critical time could hinder operations.
  • Ongoing litigation could adversely affect the company if resolved unfavorably.
  • The recent amalgamation with Sanstar Bio-polymers and the acquisition of ECL could lead to integration challenges. Discrepancies in financial statements or operational hurdles post-merger may affect overall business performance.
  • Company operates in a highly regulated and competitive industry.

Sanstar Limited IPO (Sanstar IPO) GMP Today –

IPO’s last GMP is ₹30, last updated Jul 22nd 2024. With the price band of 95.00, IPO’s estimated listing price is ₹125 (cap price + today’s GMP). The expected percentage gain/loss per share is 31.58%.

Note : The GMP prices shown here are only news related to the grey market. We do not trade/deal in grey market or subject to rates, nor do we recommend trading in grey market.

Conclusion –

Based on FY24 super earnings, the issue appears aggressively priced. Amidst rising demand for its products, the management is confident of improving the trends reported and its performance post expanded capacities. Well-informed investors may park moderate funds for the long term.

Hope the details presented in this blog will assist you in learning about the financial performance of the company. Before making an investment in the company’s upcoming initial public offering (IPO), thoroughly research the company, its finances, business prospects, and market trends.

Also, investors should consult their financial advisor, conduct further due diligence, analyze industry trends and the competitive landscape, and consider risk factors before making an investment decision.

For all such latest information on upcoming IPOs, keep visiting our website.

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Disclaimer:This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.

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